China Northern Rare Earth intends to establish a joint venture with Ningbo Shuoteng to build a project for the production of 10,000 tons per year of cerium-neodymium iron-boron magnetic materials.

Northern Rare Earths (600111) announced on the evening of March 13 that the company plans to invest 1.16 billion yuan with its own funds to jointly establish Northern ShuoTeng Magnetic Industry (Inner Mongolia) Co., Ltd. (hereinafter referred to as “New Company”) with Ningbo ShuoTeng New Materials Co., Ltd. (hereinafter “Ningbo ShuoTeng”). The new company will serve as the main entity to build an annual production of 10,000 tons of cerium-containing neodymium-iron-boron magnetic materials project. The new company is a joint venture in which the company and Ningbo ShuoTeng hold 34% and 66% of the equity, respectively.

According to the introduction, Ningbo ShuoTeng is not a dishonest person subject to enforcement and mainly engaged in the research, production, and sales of cerium magnets. Ningbo ShuoTeng is a leading enterprise in China’s cerium magnet industry and is a customer for the company’s product sales. The joint establishment of the new company with Ningbo ShuoTeng is to further promote the company’s complete high, medium, and low-end industry layout in the rare earth permanent magnet materials industry, accelerate downstream extension of the industry chain, and move towards the mid-to-high end of the value chain.

The 10,000-ton cerium-containing neodymium-iron-boron magnetic materials project will be built in two phases. The first phase mainly involves the construction of a production line for 5,000 tons of cerium-containing neodymium-iron-boron magnetic materials and supporting auxiliary equipment, as well as providing supporting factory buildings and auxiliary facilities for the second phase. The second phase mainly involves the construction of a 5,000-ton production line for cerium-containing neodymium-iron-boron magnetic materials, some supporting auxiliary equipment for the second phase process lines, and related civil engineering foundations.

Northern Rare Earths stated that this investment is an important measure for the company to layout in the cerium-containing neodymium-iron-boron field, focusing on the construction of “two rare earth bases,” and to continuously enhance R&D and production capacity of new rare earth materials through extending, complementing, and strengthening the industry chain. It will help the company consolidate its industrial advantages, expand into high-end application fields, build a full-chain innovative ecosystem from magnetic materials to application scenarios, and develop low-cost, high-performance, and highly stable cerium magnet series products through R&D and cooperation. The goal is to increase the proportion of cerium elements in rare earth permanent magnets, promote widespread use of rare earth permanent magnets with high cost-performance advantages, and drive efficient and balanced utilization of rare earth resources, further optimizing the industrial structure. This will enhance the company’s competitiveness and value creation ability in the industry chain, and further strengthen its industry voice and influence.

On the evening of March 13, Northern Rare Earths also announced that it plans to invest 1.12 billion yuan with its own funds to jointly establish Northern Fuheng New Materials (Inner Mongolia) Co., Ltd. (hereinafter “Northern Fuheng”) with Ningbo Fuheng Rare Earth New Materials Co., Ltd. (hereinafter “Ningbo Fuheng”). The new company will be the main entity to build an annual 10,000-ton rare earth metal alloy production line project. The company is the controlling shareholder of Northern Fuheng, which will be included in the company’s consolidated financial statements.

According to the introduction, Northern Rare Earths’ existing metal industry mainly focuses on praseodymium-neodymium metals and lanthanum-cerium metals, while the medium and heavy rare earth metal industry has not yet achieved large-scale production and market promotion. The 10,000-ton rare earth metal alloy production line project will focus on developing products such as cerium, cerium-praseodymium-neodymium alloys, dysprosium-iron alloys, holmium-iron alloys, covering high-purity base alloys and functional alloys containing dysprosium and terbium. This will effectively complement the company’s metal product structure, improve product diversification, and establish itself as a leading enterprise in rare earth metals with comprehensive varieties and advanced technology.

Northern Rare Earths stated that this investment is an important step for the company to further enhance its supply capacity of rare earth metal products, accelerate the development of new quality productivity, extend, complement, and strengthen the industry chain, and promote the construction of “two rare earth bases” for high-quality development. Through advantages complementarity and comprehensive collaboration, the two parties will leverage their competitive advantages to form a competitive synergy, jointly explore market-competitive business models and profitable products, and build the new company into an intelligent, advanced enterprise capable of rare earth metal production. This will help ensure the high-quality supply of raw materials for mid-to-lower stream rare earth new materials and application industries, and maintain the stability and security of the industry chain supply chain.